The difference between open and closed medical schemes

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You may have heard the media mentioning open or closed medical schemes, and you may have found yourself wondering “what’s the difference?” To help you make the best decision for you and your family’s health, we’ve answered some of the most common questions related to open and closed medical schemes.

Who can join closed medical schemes?

It all comes down to the “who.” Anyone can join an open medical scheme, and closed schemes have specific qualifying criteria, for example where you work, your profession or industry. For example, Profmed is a closed scheme only for professionals.

How do I join a closed medical scheme?

Most closed schemes have a direct relationship with an employer or industry, in which case once you join a company offering this benefit, you are entitled to join. If, for example, you would like to join Profmed, you need to have a 4-year degree which validates your professional status.

How many closed medical schemes are there in South Africa, and which one is the biggest?

At present, there are 21 open schemes and 55 closed schemes in South Africa. The largest restricted medical scheme is GEMS (Government Employees Medical Scheme), with over 690 000 families covered. Profmed ranks under the top 10 largest with 34 700 families covered.

“It has been proven that some smaller closed schemes have healthier members and larger reserves in excess of 100%, making them far more sustainable than larger schemes with ageing member bases,” says Craig Comrie, CEO and Principal Officer of Profmed.

Can I choose to not join a closed medical scheme?

Yes, you can and check your company’s policies around not joining their closed scheme as any subsidies are often dependent on you joining their scheme.

“Employers have influence and are represented on the Board of the scheme, and therefore can curtail annual scheme increases while ensuring more relevant benefits,” adds Comrie.

Are there differences in cover between open and closed medical schemes?

Generally speaking, benefits on restricted schemes are more comprehensive than open schemes. A restricted scheme doesn’t have to cover large marketing and broker costs and uses that money to pay member claims.

Closed schemes often can design specific benefits for the industry they cover, for example, where heavy lifting may be part of the job, a more deliberate spinal programme may be offered. In some working environments, stress becomes a major driver of claims and chronic conditions down the line. Providing benefits driving healthy behaviour and cover for counselling can significantly reduce stress and absenteeism.

Comrie goes on to add that “it is known that a person who has adequate medical cover is more productive in the workplace, so there are also benefits having a healthier workforce for the employer.”

Will a closed scheme still pay my claims?

Absolutely. You may even find that more claims are paid due to the more comprehensive benefits offered by the closed scheme.

How do I select the most appropriate medical scheme?

  • Understand your medical needs and affordability level.
  • Investigate whether each option in a scheme would cater to your needs – remember to also compare options across schemes.
  • Test your choice against similar offerings from other schemes (sometimes bigger schemes don’t offer better value and may restrict the benefits you need).
  • Don’t let added “frills” guide your choice of a medical scheme.
  • Where possible, compare plans on websites and where needed, find a broker who can help you.

When joining a scheme, you can work through a broker, but Comrie adds that you can also take a more direct route, by doing an easy web search or phoning a scheme directly on their call centre.